RBS chief Ross McEwan: Bank still has 'a lot of work to do'

RBS chief executive Ross McEwan says the bank has re-established "a very
good relationship with the Government", acknowledging that there is
still "a lot of work to do"

Royal Bank of Scotland will set up a £38bn internal "bad bank" to dispose of legacy toxic assets on its balance sheet.

Confirmation of the bad bank came as RBS reported a statutory pre-tax loss for the third-quarter of £634m, largely on the back of a charge taken by the lender against a change in the value of its own debt.

Friday's results are the first overseen by Mr McEwan, who took over from Stephen Hester at the start of September. He wants to launch his own review of the bank’s strategy and the resolution of the bad bank issue will remove a major issue in any planning discussions.

The announcement also coincided with a report by Sir Andrew Large on the bank's lending to small and medium-sized firms in which he problems in the way RBS treats SME customers – including long delays on approving loans, a topic that Mr McEwan acknowledged needed work.

"We've got a lot of work to in regards of our UK business. There are things that are taking far too long to do from a customer perspective, why does it take five weeks to get an agriculture loan approved? it should be five days," he said.